Modest gains were seen in the natural gas pit yesterday after alocal-led sell-off was stymied by scale-down trade buying. Asidefrom cash prices moving a couple pennies higher, the fundamentalpicture remained overwhelmingly bearish, prompting traders to blametechnical factors for Thursday’s strength. The February contracttraded up 2.8 cents to $2.196 and March bounced 3.6 cents to$2.237. Equally as impressive was the 12-month strip, which gained2.6 cents to $2.391

It was a “pure technical short-covering rally,” said Ed Kennedyof Miami-based Pioneer Futures, in explanation of yesterday’sstrength. “Sandy Trot led the charge lower both [Wednesday] and[Thursday], but he was unsuccessful in pushing through some prettygood buying by utility buyers taking profits on short positions.[The February contract] might see the mid-$2.20s tomorrow, and withthe right amount of bullish ambition the upper $2.20s are possiblenext week, but I remain a polar bear in the long term.”

In daily technicals the February contract will meet minorresistance at yesterday’s high of $2.22 ahead of the top of thechart gap at $2.305. On the downside, support exists in the $2.13area and then at previous lows from the daily continuation chart at$2.08 and $2.01.

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